Trinity Rail Leasing Repays Notes, Partially Refinances Payment

Trinity Industries announced its indirect wholly-owned subsidiary, Trinity Rail Leasing VI (TRL/VI), repaid in full approximately $340 million of non-recourse promissory notes in May. TRL/VI is a wholly-owned subsidiary of Trinity Industries Leasing. The notes were issued by TRL VI in 2008 and secured by a diversified portfolio of leased railcars and certain cash reserves.

The notes had an effective interest rate of 5.63%, after consideration of interest rate hedges. Per the original terms of the notes, the borrowing margin was scheduled to increase by 0.50% in May.

As previously indicated on its first quarter 2015 earnings conference call, the company anticipated repaying the notes ahead of scheduled maturity to reduce financing costs and create flexibility to use the portfolio of leased railcars in future financings or sales to institutional investors.

The company said it has partially refinanced the notes repayment with a $250 million borrowing under TILC’s warehouse facility, which was recently renewed and increased in April from $475 million to $1 billion.

The initial effective interest rate on the warehouse borrowing is expected to be 1.95%. This refinancing was included in the company’s most recent earnings guidance.

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Terry Mulreany
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